Purchasing real estate in New York City can be a daunting endeavor, but can bring serious returns on investment if you choose the right place. To learn more about the New York City real estate market and find out some of the best neighborhoods around for investment, we spoke with Seth Levin, a licensed associate real estate broker at Keller Williams NYC. Seth has 15 years of experience in real estate and helps clients find real estate investment opportunities throughout Manhattan, Brooklyn, and Queens. We got Seth’s insider tips on New York City’s real estate market and reminds us that real estate investment isn’t all about finances— a neighborhood’s culture, lifestyle offerings, and access to transportation and other amenities are crucial considerations as well.
What is Manhattan’s best neighborhood for real estate investment right now? And what makes this neighborhood appealing from both a financial and lifestyle perspective?
One of the best neighborhoods that we have been advising our clients to look into for strong returns is the Yorkville neighborhood in Manhattan’s Upper East Side. Yorkville is an area that has recently been positively impacted by the arrival of the long-awaited Second Avenue subway line—The Q train, and is on the radar for many of our investors, foreign investors, and end users.
This is not an area known as a magnet for investment, however. Due to the lower than average per square foot pricing and the anticipation of higher rental demand and price appreciation, many well-informed investors and primary home buyers are bullish on this neighborhood. In this area, just blocks away from “blue chip” Upper East Side, buyers can purchase high-floor two-bedroom new construction luxury condos for approximately $1,500 per square foot compared to $2,500–3,000 per square foot in buildings west of Lexington Avenue.
The addition of the new train line has finally connected this area to the subway, and new restaurants, shops and higher end amenities are popping up and will certainly further aid in higher future returns for purchasers in the area.
What are the best neighborhoods for real estate investment in Brooklyn right now? What makes these neighborhoods appealing?
We have seen a big uptick in buyer interest in multi-family (specifically two- and three-family) houses in Brooklyn’s Bushwick and Bedford-Stuyvesant (Bed-Stuy) neighborhoods. Many of our savvier clients are looking at these types of properties in these two particular neighborhoods for a multitude of reasons. One of the primary rationales for investment in these two neighborhoods is the rehabilitation of much of the older dilapidated housing stock, which has pushed prices higher while attracting higher-end cafes, shopping, grocery stores, and more amenities for property owners in general.
And the property taxes in these neighborhoods are significantly less than more established blue chip Brooklyn neighborhoods. So the recent tax plan, which caps write-offs at $10,000 per year, is not an issue. Average home prices in these two Brooklyn neighborhoods, for these properties, is approximately $1,400,000, while similar properties in Williamsburg, Brooklyn, are currently approximately $2,500,000, and prices in the Brooklyn neighborhoods of Brooklyn Heights and Cobble Hill are approximately $3,500,000. We see a lot of room for further appreciation in Bushwick and Bed-Stuy. And with multi-family homes, the ability to offset much of the monthly cost through rental income is an added benefit.
What are the best areas of Queens for real estate investment? What makes these neighborhoods a smart choice from both a financial and lifestyle perspective?
Over the past few years we have seen so much growth, appreciation, and interest in Queens that we built out an entire Queens division on our team. While Long Island City and Astoria were the initial neighborhoods to benefit from this surge, the effect is reaching further east along the subway lines into neighborhoods like Sunnyside, Woodside, Elmhurst, and Forest Hills.
Woodside and Forest Hills have the added transportation benefit of access to the Long Island Rail Road (LIRR). Old commercial spaces, diners, and lower-end restaurants have been transformed into new fusion restaurants, higher-end cafes, and craft beer bars that attract younger crowds, who, in recent years, have been priced out of Brooklyn.
Warehouses and empty lots have been rezoned for residential usage and new condo projects have brought the same level of quality and amenities of new developments in Brooklyn and Manhattan. Multi-family homes are being sold all cash, usually over the asking price, to investors who will either tear down and rebuild or gut renovate the units.
The average home prices in Long Island City and Astoria are over $1,000,000 at approximately $1,200 per square foot, while those in these further east neighborhoods are selling at an average price of approximately $550,000 and approximately $775 per square foot. Due to the continued improvement of the area and the huge price drop off from the Queens neighborhoods that saw the first spike in interest, we see a lot of room for continued growth and incredible future returns for buyers in these areas.